Date of Release: July 9, 1996 Nelson Registry File No: 3697 IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: ) ) ANN JENSEN ) ) PLAINTIFF)REASONS FOR JUDGMENT OF THE ) AND: ) HONOURABLE MR. JUSTICE COOPER ) JOHN MADELUNG ) ) DEFENDANT) D.W. Skogstad, Esq. counsel for the Plaintiff B.F. Suffredine, Q.C. counsel for the Defendant Dates and Place of Hearing: May 14 & 15, June 26 & 27, 1996 at Nelson, British Columbia 1 The plaintiff brings this action for a declaration pursuant to Rule 5(20) of the Rules of Court that she is the sole owner of property at 845 Lakeview Heights in the City of Nelson, for an accounting of contributions made by the defendant to the plaintiff's home, and for aggravated damages arising out of the defendant's high-handed conduct in refusing to leave the plaintiff's home when required to do so. 2 The defendant counterclaims for a declaration that the plaintiff holds the lands in question in trust for the parties as tenants in common, and in the alternative seeks an order determining the respective interest of the parties in the said lands or judgment for the value of the labour and materials provided by the defendant to the improvement of the residence situate thereon. 3 The plaintiff is a 36 year old woman who separated from her husband in 1983 but remains married to him. She is employed in Nelson as an appraiser for the Unemployment Insurance Commission at an annual salary of $34,000.00. 4 In May, 1991 the plaintiff purchased the Lakeview Heights property from Helen Robertson, an elderly lady. The original asking price for the property was $55,000.00 but a price of $35,000.00 was negotiated and agreed to. The plaintiff obtained $21,000.00 in financing from the Royal Bank of Canada and executed a mortgage to the bank for that amount. It is of interest to note that the bank appraised the land and house at $66,000.00. 5 The plaintiff moved into the house prior to meeting the defendant. She says that initially she would have liked to have the kitchen at the front of the house to afford a view of the lake. Such an alteration would have required moving the bedroom to the rear of the house. The house then consisted of 700 - 800 square feet of floor space as well as a basement. At the time, the plaintiff says she was considering having alterations to the house done by her brother, a house builder in Ontario, or her brother-in- law who also lives in Ontario and who renovates homes. 6 The parties had met in February, 1991 when the plaintiff was renting an apartment on Observatory Street in the city. At that time the defendant was, and still is, a grocery clerk in Overwaitea Foods Ltd. in Nelson. He was living in a trailer at the time. The parties began staying overnight in each other's residence occasionally. Following the plaintiff's purchase of the Lakeview property, the defendant commenced spending most of his time in her home. 7 In February, 1992 the parties took a vacation tour to the Bahamas. It was there, according to the defendant, that they discussed renovations to the plaintiff's house. The defendant had previously sold his home and had $45,000.00 in savings. 8 The parties discussed changing the floor plan. The defendant says he offered to pool his money with the plaintiff and to renovate her house. He says he was in love with her and early on asked her to marry him but she was not ready for that. Later, when he asked her again, she agreed to marry but said she was still legally married and they would have to look after that first. 9 After their return from the Bahamas, the defendant arranged for plans to be drawn for the renovations to be made. Those renovations commenced in May, 1992. By July, it was necessary to vacate the house and the parties then moved into the defendant's parents' house. By November they were able to move back into the renovated house. Renovations continued until June, 1993 when they ceased. By March of that year the relationship had deteriorated. The plaintiff says that her mother had died and their situation had become "dysfunctional." She moved into another bedroom and never returned to the defendant's bed. 10 By August, 1993 the parties agreed that the relationship had ended and the defendant agreed to move out of the house in two weeks. When the two weeks expired the defendant informed the plaintiff he would not vacate until he received settlement. The plaintiff only returned to her house after the defendant moved out on December 31, 1993 following an order of this court to do so. 11 It is the defendant's position that he organized the labour and materials to effect the renovations to the plaintiff's house because he was in love with her, he expected they would marry, that they jointly agreed to the plans for renovation, and that the home would be their matrimonial home. 12 The plaintiff says she never wanted the extensive renovations that were made, that they were never in fact completed, that she didn't offer to pay the defendant for his labour, that she believed working on houses was his hobby and that he would do the labour himself. 13 The fact is that the house was almost completely demolished and then reconstructed. From a property purchased for $35,000.00 and appraised at the time by the bank at $66,000.00, it was appraised at some $169,000.00 on October 15, 1993, shortly before the issue of the Writ of Summons. The 1994 Property Assessment, reflecting the value as of October 31, 1993 was $150,800.00, representing land value of $48,800.00 and building value of $102,000.00. 14 An "expert" report of Dale Willness dated April, 1995, tendered on behalf of the plaintiff, indicated the value of all work done on the plaintiff's house based on a description given to him by the plaintiff of work done in new construction on her house, amounted to $25,581.00. Mr. Willness did not testify in person but it appears that he never in fact examined the plans or the physical site and relied on a "renovation estimation book". 15 The defendant has produced two "expert" reports, one from J. Sawada who visited the site and estimated the cost of labour for the renovations at $40,112.00. The second report given by Charles Beaulac, made after viewing the residence, house plans and construction photographs, indicated a labour value of $35,235.00. 16 The defendant does not deny that the plaintiff assisted in the renovations to the extent she was capable of doing so but says she has no expertise in construction work. Her labour contributions were limited to cleaning up, painting, assisting in levelling the basement floor, and planting shrubs. The defendant's contributions consisted of his own carpentry and associated labour as well as that of his father, his friend Simon Grypma, an electrician, and others of his personal friends and relatives. 17 The defendant has produced invoices and receipts for expenditures made by him amounting to approximately $31,300.00. He claims to have also purchased and installed a number of appliances. I find that in all he expended from his own resources some $35,000.00. 18 It is clear in my view that the defendant has made a significant contribution both in labour and materials to the plaintiff's home. I find that there was no agreement that the defendant be placed on title to the property as a tenant in common. Although such an offer was made by the plaintiff in an effort to reconcile in 1994, the offer was rejected. The defendant in reality relies on a claim in constructive or resulting trust based on unjust enrichment. 19 The plaintiff has borrowed $84,679.00 from the bank to effect the renovations. She has a home and parcel of land which may be valued at approximately $169,000.00 as at the date of the counterclaim. The defendant's labour and expertise appears therefore to have increased the plaintiff's equity in her property by some $85,000.00. 20 The law is now clear following Peter v. Beblow (1993), 77 B.c.L.R. (2d) 1 that in an action for unjust enrichment three elements must be satisfied, viz: 1. an enrichment 2. a corresponding deprivation 3. the absence of a juristic reason for the enrichment. 21 These three elements appear to exist in this case. Clearly the plaintiff has been enriched by the defendant's endeavours and he has correspondingly been deprived by his financial and labour contributions. There appears to be no juristic reason for the defendant's contribution and it therefore is clear that a claim for unjust enrichment is made out. 22 As Madam Justice McLachlin said in Peter v. Beblow at Pp. 5-6 unjust enrichment in equity permitted a number of remedies depending on the circumstances. They include a payment for services rendered on a quantum meruit basis or a constructive trust in the property entitling the beneficiary of the trust to a portion of the profits realized from a sale of the property. The latter remedy of constructive trust is said to arise where monetary damages are inadequate and where there is a link between the contribution that founds the action and the property in which the constructive trust is claimed. 23 In the circumstances of this case, the net appreciation in value of the Lakeview property increased from $66,000.00 to $169,000.00 during the period of the joint cohabitation of the parties. Of that net increase of $103,000.00 the plaintiff contributed $84,000.00 and the defendant contributed a total of some $70,000.00, depending on whose valuation of the construction work is accepted. I prefer to accept that of Mr. Beaulac who estimated $35,235.00 as the value of that work. 24 Based on those factors I find that the defendant is entitled to a constructive trust in the property in question for 7/15 of the net appreciation in its value as at December 31, 1993, namely, the sum of $48,000.00. 25 I dismiss the plaintiff's claim that the defendant is not entitled to an equitable remedy on the ground that he does not come with "clean hands". Snell's Equity 29th edition, says at P. 31 that "He who comes into equity must come with clean hands" but at P. 32 the learned author says "The maxim must not be taken too widely." In the case at bar I am unable to conclude that the defendant's conduct merits such a declaration nor the sanction which would follow it. 26 I am however satisfied that the defendant should be subjected to an award of aggravated damages to the plaintiff for failing to remove himself from the plaintiff's premises without a monetary settlement. Other remedies for recovery of monies that he felt were due to him were available yet he continued to trespass on the plaintiff's property from at least September, 1993 until the end of December of that year. During that time the plaintiff was in my view wrongfully deprived of her sole right to the use and enjoyment of her property. She was then obliged to resort to these proceedings to obtain her rightful possession. For that high handed conduct I award the plaintiff $5,000.00 in aggravated damages to be set off against the $48,000.00 award to the defendant. 27 Should the parties be unable to agree they may address the court on the issue of costs within five days. "Cooper, J." Dated the 9th day of July, 1996.